You’ve packed several major conceptual errors into this, so it’s worth taking it apart and baring the underlying context.
Detroit is a tragedy. No question. Nor is it singular. I could name dozens of other northeastern former industrial hubs of all sizes for which the same sad history has been at work. Detroit has the highest percentage of people living in poverty, but also in the top ten are Hartford, CT, Cleveland, Dayton, and Cincinnati, OH, Providence, RI, Buffalo, NY and, um, Rochester, NY.
Who gained from these cities’ falls? The South and the West. People starting moving out of the cold north for sunnier climate in large numbers starting in the 1950s. You can point to a multitude of reasons starting with air conditioning becoming widely available and making summer living bearable, the need to replace old industrial stock and the desire of companies to do so in less unionized areas, the move toward a service economy that lessened the dominance of industry and agriculture, and the lower living expenses in areas where you could build new rather than competing with decades of previously-owned houses.
Nothing in history suggests that any individual city or area in a country must always progress and prosper, in the same way that nothing in history suggests than any individual or family must progress and proper. As long as the entirely of the country prospers, the fate of subunits does not speak to the country as a whole. Singling out Detroit as anything other than an individual tragedy is the first major conceptual error.
If you look back at that era, in fact, you could make some predictions about the rise of the South but probably not do a good job of guessing which individual cities would come out on top. It’s impossible to know ahead of time who wins. You could make predictions about the North as well, but history might also fool you. As I said, New York hit bottom around 1975. The consensus was that the city was finished. It’s now on top again, even if filled with the same inequalities that people said doomed it 40 years ago. Washington, DC, was a gloomy slum outside of the gleaming government center. Today it’s gentrifying rapidly, a problem to some but a boon overall. When Boeing moved its headquarters to Chicago, somebody erected a billboard saying “Will the last person to leave Seattle please turn out the lights.” Today it’s the model city for the Internet age. San Francisco went from the Summer of Love to a haven for drugged-out homeless people. It’s problem now is literally so much success that people can’t afford to live there.
Not understanding that cities, as with everything from people to nations, have cycles of success and failure and that nobody knows what the next cycle will bring is the second major conceptual error. Detroit could come back. It offers cheap opportunity and that’s always a draw. It may not. We don’t know. But taking a slice out of a long cycle and using that slice to proclaim decline is always wrong.
The next major conceptual error is somewhat more subtle, especially to those not in the U.S., even if it’s already been mentioned in this thread. Detroit, the center city that gives the area its name, and the Detroit Metropolitan Area are two very different things, economically, politically, socially, and in every other way. The city has zero political power over those who live outside its boundaries. Today that is normally 60 to 90% of the total population. It is 80% for Metro Detroit. (The combined economic area of Detroit, eight other Michigan countries, and Windsor, Ontario had 5.7 million compared to Detroit’s 681,000. Which area you use for any given comparison should vary.) Although the center city gets all the headlines, it’s clear that a judgement about the area shouldn’t be made based on 20% of the population. Metro Detroit is a prosperous area, though certainly hit by the recession. Talking about “Detroit” as just the center city is basing your judgement on an obsolete but historically entrenched political entity. Most - but certainly not all - people think that a prosperous metro area requires a prosperous center city, but that is a huge political argument in its own right.
What you see in the headlines seldom reflects the total reality. If Detroit is anything, it is an outcome rather than a symptom, and an outcome from mistakes made in the 50s and 60s, exactly the period people keep insisting were better times. If you look back from prison at the great spending spree you had on stolen money can you really say those days were better? If you do, you’re just setting yourself up for future failure. Maybe some forces in the U.S. are making this mistake - the dismantlers, we might call them. But they have no chance of succeeding. And they are loudest now because they know this is the last short window they have before becoming an absolute minority and losing any hope of taking the country backwards.
